Tyler Cowen for TAI: Good morning, Mr. Nader, and thanks for talking with The American Interest. I very much appreciated Unstoppable. Would you say that you’ve always favored this kind of Left/Right alliance on corporate issues, or is this something new in your thought?
RN: Yes, beginning way back, during my law school days. I always marveled that the powers that be focus so much on areas of disagreement—more recently as in issues like gun control, school prayer, and abortion. But the corporate media would not cover a lot of areas where Left and Right do agree that matter very much to our country and its place in the world. And that is mirrored by the fact that our two major political parties keep these convergent areas off the table in their debates. The obfuscation is quite impressive. So you have this combination of Wall Street and Washington, the corporate powers and their political allies, converging across party lines to perfect this corporate government against the wishes of a majority of the American people. That’s what has to be overcome, and that’s what I wrote my book about.
TC: If I look back at your career, I see you’ve been fighting various kinds of wars against different injustices. If you look back on all those decades, during which time you’ve been right about many things, what do you think is the main thing you’ve been wrong about?
RN: Oh, a lot of things. Nobody goes through these kinds of controversies without making bad predictions. I underestimated the power of corporations to crumble the countervailing force we call government. We always knew corporations like to have their adherents become elected officials; that has been going on for a long time. But I never foresaw the insinuation of corporatism as a policy in one agency after another in government.
Franklin Delano Roosevelt foresaw some of this when he sent a message to Congress starting a temporary national economic commission (TNEC) to investigate concentrated corporate power. That was in 1938. In his message he said that whenever the government is controlled by private economic power, that’s fascism. Now, there isn’t a department or agency in Washington where anyone has more power—over it and in it, through their appointees, and on Congress—than corporate lobbyists and political action committees. There’s no organized force that comes close to the power daily to twist government in the favor of Wall Street and corporatism, and to disable government from adequately defending the health, safety, and economic well-being of the American people.
TC: Let’s say we look at the U.S. corporate income tax as a measure of the power of these groups. The rate on paper is 35 percent, which is comparatively high. After various forms of maneuvering or evasion, corporations actually pay about 17–18 percent, which is more or less in the middle of the pack of OECD nations. So if corporations have so much political power in the United States, why is our corporate income tax still so high?
RN: Because they can avoid it. They can protest that we have the highest corporate tax rates in the Western world, but everyone knows that they game the system to levels that are staggeringly disgraceful. For example, Citizens for Tax Justice regularly reports on corporations like General Electric and Verizon that make huge U.S.-based profits but pay no Federal income tax. One worker in either of those companies pays more in dollars to the U.S. Treasury than these companies do, year after year.
Furthermore, giant banks are paying less than 10 percent now. There are so many write-offs, deferrals, and deductions that they don’t have to worry much about the taxes on their U.S. profits. The large corporations are now moving toward tax exemption. They have divisions within their corporate structure devoted solely to finding loopholes, and their people get bonuses for diminishing their tax responsibilities.
And that doesn’t even account for the offshore tax shelters. The New York Times reported that a bunch of companies report making $147 billion in small islands like the Bahamas. But we know they’re just transferring the money from countries with little taxation to these deliberate tax havens.
TC: Can you cite some historical examples of countries that have tackled these kinds of problems and really won that battle?
RN: I think Scandinavia is a good start. In the mid-19th century, the country was among the poorest in Europe. The rise of Sweden’s quality of economic development was associated with the growth of the cooperative movement, trade unions, and the social democratic parties, and the establishment of a framework where, to a degree greater than in most other countries, commerce in Sweden had to adjust to the social insurance systems that were set up. So the supremacy of commercialism over workers, consumers, and other smaller power centers was not tolerated.
TC: But Sweden would be considered quite a corporatist model by a lot of political scientists. Even as late as the 1990s, the Wallenberg family owned about three quarters of the stock exchange. OECD data show that Sweden and the United States have the greatest wealth inequality. Has Sweden really gotten away from corporatism and corporate privilege?
RN: The Swedish political economy has made its peace with big business, but in a way that doesn’t deprive the mass of the people of an exemplary standard of living. Swedes today have a minimum of five weeks’ paid vacation; they have, through their taxes, paid daycare and paid sick leave; universal health care; good public transit; stronger labor laws than we do; and the kind of retirement system we can only dream of.
TC: Keep in mind that per capita income in Sweden is about the same as that of African-Americans. Would you agree that there has been some penalty to all this in terms of the absolute standard of living?
RN: No, not at all. Just look at the social welfare standards. They get income in two ways. One is from salaries and wages, and the minimum wage is much higher in Sweden. And the other is residuals from their taxes. Our system has a lower minimum wage, inadequate housing, poor public transit, and massive poverty—17 million children are characterized as food insecure. In Sweden they don’t allocate huge amounts of the budget to military contracts and wars overseas. So they get a much larger residual for public services from their tax payments to supplement their wages, salaries, and pensions.
TC: Certainly, one relevant difference between Scandinavia and the United States is the role of organized religion in public life. If someone cited to you religion and American churches as the sector of our society that has best resisted corporatization, would you agree or disagree? And if you disagree, what would you cite instead?
RN: They’re resisting less. They’ve given up on gambling, and the main bulwark against widespread gambling—outside of Las Vegas—and against government-run lotteries, used to be the churches. But then bingo started in church basements, and the gambling interests went to work on the churches. They claimed that their businesses in Atlantic City would help the elderly throughout New Jersey. That never happened, of course, so the churches lost their credibility. A society riven with gambling is one that bets on the future rather than builds the future.
So what countervailing force is there? Labor unions are weaker. We have a tremendous disruption of community civic values that used to hold commercial values in check. People sense this more and more, and that’s why I am able to describe an emerging Left/Right alliance against the corporate state in Unstoppable. It’s the only possible basis of a political realignment possible over the next ten to twelve years. It has the support of public opinion and sentiment. You see bipartisan reform of the juvenile justice system in a dozen state legislatures. Left-Right alliances defying their own leaders are beginning to challenge the extension of these global, corporate-managed trade agreements in Congress; and there’s growing opposition to more wars of choice overseas. You’re beginning to see 70–80 percent support for an inflation-adjusted minimum wage. You can’t get that kind of poll result without a lot of conservative participation. And the poll results come in at about 90 percent in favor of breaking up the banks that are “too big to fail” because we fear that their speculative octopi will get us into another deep recession or, worse, an outright depression.
TC: Do you think we need a more communitarian culture to push back against the corporate state and its abuses? I’m very struck by something in your book The Seventeen Solutions, for instance, where you talk about how America needs a new tradition of sports. Sports, you say, shouldn’t be something corporate-run that people watch on television, but something they do themselves, something that creates community, something that brings people together. Is that kind of social cohesion a necessary first step?
RN: Yes. We’ve become too much of a spectator culture, spending the better part of each day in front of screens. One of the consequences is that the few more athletic kids play while the rest watch, and the lack of physical activity leads to obesity. It’s not just youngsters; adults conform with the purposes of corporate advertising. The processed food producers and some other corporations, like pharmaceuticals, get rich when Americans get fat.
Corporations are also extremely adept at commercializing childhood and maneuvering around or undermining parental authority. They urge children to nag their parents at a young age to buy junk food, soft drinks, and violent video games. You see fewer kids out in the street now, just playing. These old games we used to play, like hopscotch—kids today wouldn’t even know what you’re talking about. But they do know a lot about video game violence and the heroes and villains involved.
So I think we do need a broad recognition of the need to bring the neighborhoods and communities into more participatory sports. Just a hoop, and throwing the ball into a hoop—anything to connect human to human rather than let kids wallow more and more in virtual reality. The whole electronic world is affecting us in ways we have yet to discover. That amount of time spent day after day in front of these screens can’t not have an effect on the human mind, and probably not a healthy one.
TC: But there’s a literature in psychology that refers to something known as the Flynn Effect, which shows that with every generation human IQs are rising by several points. This seems to indicate that, first of all, we’re in some ways getting smarter. Second, one of the potential explanations for the Flynn Effect is that young people are hit by this blizzard of images and symbols that they have to process, and this seems to be raising their IQs. This is necessarily speculative, but the evidence on balance seems to suggest that all the stuff thrown at kids is actually helping them get smarter. What do you think of that?
RN: Well, the society is getting smarter at the same time as it’s getting dumber. In other words, we have more scientists, more engineers, more people with better hand-eye coordination as a result of these video games. But look at how we’re tying ourselves up in knots! The kids today hardly know about the Vietnam War. As the old saying goes, “If you don’t know history, you’re doomed to stay forever a child.” They don’t know where the town hall is; they have no connection to nature. So maybe they can fill out various kinds of standardized tests and do puzzles and react very quickly to these video games, but quo vadis? To what end?
Our society operates disgracefully below its potential. It has tied itself up in a corrupt and wasteful health care system, where you have more than 800 people per week dying because they can’t get health care to get a diagnosis or treatment, according to a Harvard Medical School study. We’ve got students burdened with $1.2 trillion in debt. Why is it that some European countries, working from that tax payment residual, offer tuition-free education? It’s a big deal when young people graduate with so much debt. They become risk-averse; they can’t buy homes at the same rate they used to when they weren’t under these burdens.
The same is true of the military-industrial machine. Where’s the major enemy? There’s no more Soviet Union, and China wants our jobs and industry. The Chinese aren’t going to send missiles here, and we’re spending $800 billion, including wars in Iraq and Afghanistan, every year just to remain a military superpower desperately searching for enemies, or creating them through exaggerated threat analyses. So what’s so smart about individuals when collectively they can’t have the decent society that is well within our grasp, and when young people increasingly believe, according to all the polling on this, that they won’t be as well off as their parents?
TC: When it comes to human nature and human behavior, then, would you describe yourself as a pessimist?
RN: Pessimism has no function. It’s an indulgence of people who have little stamina to confront the challenges of modern life. And it’s a good way to rationalize their withdrawal from the great work of human beings, which is, as Senator Daniel Webster said, justice.
TC: But on the main issue you’re fighting, which is corporatism and corporate privilege, you admit that things have become much worse?
RN: It’s not just me. A lot of conservatives and libertarians think that corporations are too allied with the wars of empire, the bloated military budget, massive and diverse corporate welfare from bailouts to handouts to protections from market discipline. The Patriot Act’s restrictions on civil liberties have drawn the ire of people like Ron and Rand Paul as well as the American Enterprise Institute, and many other think-tanks considered conservative.
TC: But is there some fact about the world that makes you more optimistic, or is that just a more useful attitude?
RN: If you look at the history of nations, major redirections for justice were brought about by never more than one percent of the active citizenry. Whether it was civil rights, the environment, or consumer protection, they represented what Abraham Lincoln called the “public sentiment.” Nowadays most people give up on themselves and rationalize their own powerlessness, but it takes only a very few people in congressional districts and around the country to make major, long-overdue changes in American society that are supported by large numbers of people.